“New T-Mobile” is the name given to the proposed communications firm after the merger of T-Mobile and Sprint. The Federal Communications Commission or FCC gave its go-ahead for the merger proposal involving the third and fourth-largest telecom operators in the United States. The deal is worth $26.5 billion and the consolidated entity will still be the third-largest after Verizon and AT&T.
FCC Imposes Conditions on Approving the Merger
FCC has added some riders while approving the merger of T-Mobile and Sprint. One of them says that the new merged service provider must ensure their coverage is available to 97% of the total population and the period to reach this milestone is 3 years. The other stipulation is that the companies should make sure 90% of the citizens will be provided with internet connectivity on their mobile phones at speeds of at least 100 Mbps. The time allowed for this is six years. Now, if the companies failed to ensure this, FCC can impose a penalty of $2 billion on them. The next step for T-Mobile and Sprint is to sell this merger to the attorneys general in the states, which looks a little difficult going ahead.
More Than a Year in the Making
The two service providers made an announcement on their proposal to merge in 2018. It has taken this long for them to receive the formal approval from the FCC. The Department of Justice had cleared it earlier.
As the mobile phone services ecosystem undergoes rapid changes with new technologies entering the space, this kind of consolidation of businesses is bound to happen. Small players find it harder to stay on without getting bruised in the fight with the giants. So, two weak companies come together as one strong force to take on the biggies, in this case, AT&T and Verizon. The authorities, on the other hand, would want to be certain that the consuming public does not have to suffer due to poor service or higher tariffs. Expanding the communications infrastructure throughout the country is one key objective of the FCC.
The implementation of the 5G service across the country is another objective that the FCC is focusing on and all three major carriers will be busy doing that. The US would want to beat China and own leadership in the 5G space.